T

he official calculations of domestic lenders'€™ business plans for this year showed that loans were expected to grow no more than 16 percent, according to an official at the Financial Services Authority (OJK).

OJK commissioner on banking supervision Nelson Tampubolon said lending growth ranging between 14 and 16 percent had been calculated based on the business plans submitted by banks at the end of November last year.

'€œThe range is not too different for third-party funds [DPK], which are slightly above loan growth. We are trying to narrow the gap with the credit range,'€ he said recently.

The OJK'€™s calculation is slightly lower than Bank Indonesia'€™s prediction of between 15 and 17 percent loan growth this year, while third-party funds would range between 14 and 16 percent.

The central bank'€™s loan prediction was based on its forecast that a number of government programs would prompt positive national economic growth, which is targeted to reach 5.8 percent in the 2015 state budget.

Nelson said earlier that global economic uncertainties could shadow Indonesia'€™s economic growth and banking industry this year.

'€œThe decline in global commodity prices will affect the domestic economy and banking performance, such as loans and liquidity,'€ he said.

Bank Danamon'€™s economist Anton Hendranata said the government would need to pursue growth by carefully selecting manufacture-based exports as low commodity prices and weak global demand could linger this year.

According to BI'€™s latest data on Indonesia'€™s broad money supply, or money in circulation (M2), banking loans nationwide had only grown 11.7 percent to Rp 3,626.2 trillion (US$285.41 billion) from Rp 3,245.3 trillion as of November last year.

BI recorded that working capital and investment loans, which grew 11.4 percent and 13.2 percent respectively, contributed mainly to the lending slowdown this year.

BI and OJK had previously forecast that nationwide loan growth by the end of last year would be around 15-17 percent and 16-18 percent, respectively.

Both forecasts, as well as the realized percentage by November last year, were significantly lower than the 21.79 percent in 2013.